The Indonesian Anti-Dumping Committee (KADI) has started an anti-dumping investigation last week on imports of polypropylene (PP) co-polymer from five origins into Indonesia.
The anti-dumping investigation is targeting selected PP exporters from South Korea, Singapore, Malaysia, Vietnam and UAE, as well as five local Indonesian importers. Imports from the five specified countries made up 84pc of Indonesia's PP co-polymer imports in 2022.
The suspected PP exporters and importers are expected to provide their responses concerning the anti-dumping investigation by 27 August. The investigation will look into the dumping of PP co-polymer supplies in 2022, with reference to import data for 2020 and 2021, and will take up to 12-18 months, according to market sources, although further details are unclear.
The investigation was prompted by Indonesia's largest petrochemical producer, Chandra Asri, which has requested for the imposition of anti-dumping actions since late June this year. Increasing PP co-polymer imports to Indonesia has likely threatened the producer's market share in the country as well as its profitability.
Higher feedstock costs and supply risks since the start of the Russia-Ukraine conflict, a slow recovery in demand post-Covid-19 and inflationary pressures have already led to southeast Asian polymer producers suffering losses in 2022. An oversupply of PP in Asia-Pacific since 2021 has further increased competition among regional producers and pressured prices.
Rapid Chinese PP expansions since 2020 have reduced China's import requirements in recent years, leading to producers worldwide searching for new export outlets. Indonesia, which imports more than half of its annual PP consumption, is an attractive destination for producers, according to market participants. The country is also not expecting any new PP plants until at least 2025.
Elsewhere in Asia, India's Ministry of Commerce and Industry began an anti-dumping investigation the imports of low-density polyethylene from six countries into India in October 2020. But the Indian finance ministry held back on the implementation of LDPE anti-dumping duties in June 2022, with Indian participants attributing the decision to the high costs of raw materials, which have already pressured LDPE importers and converters.
In southeast Asia, the Philippines began imposing additional safeguard duties for the imports of high-density polyethylene (HDPE) from selected countries into the Philippines, to protect the market share and profitability of local producers. HDPE imports from key exporting nations including Saudi Arabia, UAE, Singapore, Thailand, Malaysia and Indonesia into Philippines are subject to additional safeguard duty of 1,338 Philippine peso/t ($23.60/t) in the first year of implementation with effect from December 2022, and this will be subsequently reduced in the following two years, but is subject to revisions.
Increasing new polymer supplies and expectations of more expansions in the coming years, coupled with a slow recovery in downstream consumption post-pandemic have led to southeast Asian producers seeking measures from local governments to protect their domestic market shares. This normally leads to increased polymer import tariffs, aimed at reducing polymer imports or dumping activity.
Conversely, the implementation of the UAE-Indonesia Comprehensive Economic Partnership Agreement is expected to reduce import tariffs of most goods traded between the two countries, including polymers. Imports of UAE-origin polymer supplies to Indonesia are currently subject to a 10pc import tariff, but this could possibly be gradually reduced over a period once the trade pact is implemented, according to Indonesian participants, although further details were not available.
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